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Based on what I'm reading, it sounds like a massive liability is on their hands.

adventured 8y ago
You're being downvoted, however that is correct. Norwegian Air was the first out of the gate with compensation demands on Boeing.[1] They've recently been in a perilous financial condition, so I'm sure this situation is hurting them more than some.[2] Boeing or their insurer/s will eat a large payout to victims and I'd expect a bunch of airlines to receive some manner of compensation for the mass groundings. They can afford it. $9.5 billion in cash and $11.8 billion in operating income the last four quarters. It's really the reputation damage that hurts a lot more than the direct liability. That damage can last a decade or more and spur long-term erosion (lost sales also obviously hit the service business, which Boeing has worked to expand). They've seen their market value go from ~$80 billion to a recent high of ~$250 billion over just 30 months. That puts them among the elite global corporate giants in valuation. That's based on the way they've been outperforming Airbus the last few years and the improvements in their business that took profitability from $5b to $10b+ per year. Especially with China's state-made 737 competitor inbound, now is a very bad time to be screwing up in that segment. China would love nothing more than to use an opportunity like this to replace Boeing and launch their competing Comac C919 into the market (set to go on sale soon).[3] China can effectively throw a state switch and force all domestic airlines to buy the C919 when it becomes available; the mess with the 737 just makes it that much easier to justify. [1] https://www.marketwatch.com/story/norwegian-air-expects-compensation-from-boeing-for-grounded-737-max-planes--wsj-2019-03-13 https://www.marketwatch.com/story/norwegian-air-expects-comp... [2] https://simpleflying.com/norwegian-air-facing-collapse/ https://simpleflying.com/norwegian-air-facing-collapse/ [3] https://www.foxbusiness.com/features/chinas-boeing-737-max-competitor-is-about-to-be-sold https://www.foxbusiness.com/features/chinas-boeing-737-max-c...
- inferiorhuman 8y ago
  The C919 has been almost ready for a real long time now. Comac can't even get their license built DC-9 up and running. As of last year I think there were five flying a total average of around one flight segment daily. The C919 is an entirely new design intended to have more domestic Chinese content — fat chance it'll be in production real soon now, even less of a chance it becomes a serious contender. Meanwhile the Russians, who have significantly more experience with airliners, released the SSJ-100 to fairly positive reviews. Unfortunately the after sales support was trash and airlines struggled to keep it flying. Selling a competitive airplane is far more than just the plane itself. There's no way Airbus or Boeing see Comac as a threat. The real threat was Bombardier. Their C-series was an extremely competitive offering and Bombardier has the support infrastructure in place to sell it. Both Swiss and airBaltic seem to love it. Of course, Airbus bought a majority stake in the program.
c3534l 8y ago
There's always a massive lawsuit when it comes to airplanes. Any crash, ever, they're gonna have to pay out. So that's the safest bet you can make.

You're being downvoted, however that is correct. Norwegian Air was the first out of the gate with compensation demands on Boeing.[1] They've recently been in a perilous financial condition, so I'm sure this situation is hurting them more than some.[2] Boeing or their insurer/s will eat a large payout to victims and I'd expect a bunch of airlines to receive some manner of compensation for the mass groundings. They can afford it. $9.5 billion in cash and $11.8 billion in operating income the last four quarters. It's really the reputation damage that hurts a lot more than the direct liability. That damage can last a decade or more and spur long-term erosion (lost sales also obviously hit the service business, which Boeing has worked to expand). They've seen their market value go from ~$80 billion to a recent high of ~$250 billion over just 30 months. That puts them among the elite global corporate giants in valuation. That's based on the way they've been outperforming Airbus the last few years and the improvements in their business that took profitability from $5b to $10b+ per year. Especially with China's state-made 737 competitor inbound, now is a very bad time to be screwing up in that segment. China would love nothing more than to use an opportunity like this to replace Boeing and launch their competing Comac C919 into the market (set to go on sale soon).[3] China can effectively throw a state switch and force all domestic airlines to buy the C919 when it becomes available; the mess with the 737 just makes it that much easier to justify. [1] https://www.marketwatch.com/story/norwegian-air-expects-compensation-from-boeing-for-grounded-737-max-planes--wsj-2019-03-13 https://www.marketwatch.com/story/norwegian-air-expects-comp... [2] https://simpleflying.com/norwegian-air-facing-collapse/ https://simpleflying.com/norwegian-air-facing-collapse/ [3] https://www.foxbusiness.com/features/chinas-boeing-737-max-competitor-is-about-to-be-sold https://www.foxbusiness.com/features/chinas-boeing-737-max-c...

inferiorhuman 8y ago
The C919 has been almost ready for a real long time now. Comac can't even get their license built DC-9 up and running. As of last year I think there were five flying a total average of around one flight segment daily. The C919 is an entirely new design intended to have more domestic Chinese content — fat chance it'll be in production real soon now, even less of a chance it becomes a serious contender. Meanwhile the Russians, who have significantly more experience with airliners, released the SSJ-100 to fairly positive reviews. Unfortunately the after sales support was trash and airlines struggled to keep it flying. Selling a competitive airplane is far more than just the plane itself. There's no way Airbus or Boeing see Comac as a threat. The real threat was Bombardier. Their C-series was an extremely competitive offering and Bombardier has the support infrastructure in place to sell it. Both Swiss and airBaltic seem to love it. Of course, Airbus bought a majority stake in the program.

c3534l 8y ago

There's always a massive lawsuit when it comes to airplanes. Any crash, ever, they're gonna have to pay out. So that's the safest bet you can make.